Foreign Exchange (Forex)

October 16, 2014 | By bryant

One very unique aspect of the Ripple ecosystem is that it creates a direct, peer to peer foreign exchange (Forex or FX). Ripple’s distributed currency exchange allows anyone to trade currencies on a global protocol. Trades are peer-to-peer, automatic, and have no fees or added margins. There are no brokers, middlemen, or intermediaries, as trades are automatically processed by the protocol. The result is complete currency choice: you can hold, send, and receive whatever currency you prefer.

Three things set Ripple apart as a FX: cost, speed, and ubiquity. Aside from the small amount of XRP destroyed with each trade, there are no fees or added margins for currency exchanges on the Ripple protocol. This means that each trade has one buyer, one seller, and one price. The Ripple protocol will automatically match the best available exchange orders, which gives Ripple the ability to instantly process any exchange. Instant processing is a big win for FX traders, as it allows market makers to capitalize on favorable spreads immediately. In terms of ubiquity, Ripple allows trading in all currencies. Any unit of value, including national currencies, cryptocurrencies, and mobile minutes, can be traded on Ripple, giving everyone access to a global currency market without restrictions or fees. This in turn breaks down the cost and complication barriers that currently exist for international commerce, allowing for an accelerated global economy.

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